During the annual 11TEN Innovation Summit in collaboration with Emory Healthcare, we conducted an interactive panel with five startup leaders who discussed their innovative companies and how they partner with large organizations (corporations and health systems) to create shared value and drive innovation. While each startup is at a different stage, from seed funding to corporate incubation, they all brought unique perspectives and recognized the important role of creating and establishing partnerships with larger organizations. Over the course of the panel discussion, four key takeaways were identified relating to the startup-large organization partnership journey from the outreach stage to the pilot stage.
Outreach: Startups must be comfortable with initial rejection and pivoting to find a product-market fit – receiving rapid responses and feedback is valuable even when it’s a “no.”
Early on in their journey, startups have one key goal – find and validate product-market fit. At a high-level, product-market fit is when an entrepreneur identifies a need or gap in the market and creates a novel solution that addresses the need and subsequently customers want to buy it. In order to find product-market fit, it is important for startups to get rapid, real-world feedback by testing the product or solution with target end-users and customers.
It is common for startups to knock on hundreds of doors and send hundreds of unread emails, only to find traction and engagement with just a handful of potential customers. This can be a frustrating and time-consuming effort for entrepreneurs, especially for early-stage companies where time and resources are constrained. However, large organizations can play an essential role in this discovery process. By responding to a startup’s request, a large organization can save a lot of time and effort on the entrepreneur’s side even if it’s simply responding with a “no, not at this time.”
While receiving a “no” response can be discouraging, it is ultimately an entrepreneur’s role to identify and alleviate all the reasons why a customer says “no.” In fact, startups can learn more from a “no” than from a “yes.” While it is not expected to provide detailed reasoning for passing on the opportunity, it can be critically helpful for startups if large organizations can share brief feedback as to the reason why they are not interested. Example reasons may include poor timing, lack of budget, solution irrelevance, or competing efforts. This feedback can help startups refine future messaging, identify more relevant stakeholders, and/or improve product or solution design.
Engagement: Startups seek an internal champion when partnering with industry to help navigate internal politics, provide candid feedback, and be a thought partner on the collaboration.
Once a startup has gotten through the front door of a large organization, it is important to identify, establish, and maintain a relationship with an internal champion at a corporation or health system. Not only do these individuals help open doors for startups, but also, they are critical for enabling successful, longstanding engagements within their respective organizations. Without guidance and input from internal champions, startups are forced to navigate large organizations themselves, which can be challenging, time consuming, and ultimately frustrating. Although internal champions can reside in various departments depending on the startup’s focus area, all internal champions generally have the same qualities within the organization – vast industry experience, access to resources, a robust network, a strong reputation, and decision-making authority.
An internal champion can serve three roles for a startup – an advocate, a facilitator, and a quarterback.
- Advocate: As an advocate, an internal champion can help open doors and ensure that the startup stands apart from other third-party vendors and/or startups vying for attention. This role is critical and can enable internal teams to be more receptive to listening to and potentially engaging with a startup. Warm introductions and votes of confidence from an internal champion can prove vital to startups who are often looking for fast-track into the organization.
- Facilitator: As a facilitator, an internal champion can help ensure both parties are on the same page. This is especially important as strategic priorities, expectations, timelines, and overall north stars between startups and large organizations are different.
- Quarterback: As a quarterback, an internal champion can help a startup navigate complex processes (e.g., procurement, IT, human resources, legal) and internal politics, ensure that conversations are moving forward, and connect the startup with the right individuals and decision-makers.
As with any large organization, there can be turnover or role changes, therefore it is important for startups to not only create and maintain personal relationships with an internal champion, but also to continually expand and develop relationships with other teams, business units, and leadership across the rest of the organization.
Alignment: As with any successful relationship, the startup-large organization relationship should be mutually beneficial, with both parties’ strategic priorities and “north stars” being aligned and understood.
There are clear benefits that both startups and large organizations can achieve when partnering together. On one hand, large organizations are seeking innovative, low-risk partnerships to gain a competitive edge, stay ahead of disruptive trends, increase speed to market, supplement in-house capabilities, or simply to learn more about a new market or technology. On the other hand, startups are seeking partnerships that enable them to validate proof of concepts, establish product-market fit, identify the right stakeholders, and gain access to customers, resources, and distribution channels.
However, given the differences in power dynamics, resource access, time constraints, and evolving priorities, there can often be an unbalanced transfer of value between the startup and the large organization. While challenging, it is important for both parties to recognize these differences and view the relationship as a true collaborative partnership, not simply a vendor-customer relationship. Just as large organizations assess startups, early-stage startups are assessing large organizations just as much.
For startups, especially early-stage startups, alignment with large organizations can be difficult. There must be a fine balance between openness to customization and sincerity in what can be done. Startups should not feel obligated to entirely change or customize their product roadmap for one customer as this may divert significant time and resources away from the core business. Whereas, on the other hand, large organizations should avoid making special requests that may require significant changes to a startup’s product roadmap and subsequent resources. By each party understanding the goals and perspectives of the other, both startups and large organizations can help enable efficient collaboration, optimize mutual benefits, and align partnership incentives.
Pilot: Too often startups and large organizations jump to the pilot stage, but then the effort stalls or fails because there is not a clearly defined objective and supporting roadmap.
Many large organizations recognize the benefit of piloting with startups, but they can often struggle to initially define and support a pilot going forward. While a pilot may be internally approved and resourced, it may get stuck in “corporate limbo” because of limited stakeholder buy-in, changing leadership priorities, or a lack of attention and ownership. This can be extremely frustrating for startups who expect, and need, to move quickly.
To help avoid this struggle, once there is a clearly defined partnership opportunity and alignment of strategic goals and priorities, large organizations and startups need to ensure there is an agreed upon pilot objective and a clear partnership roadmap to enable a successful path forward. Specifically for health systems, it is critical to define the intentions and objectives of the pilot. Whether it be for testing a new product or clinical research purposes, the pilot objective can have significant regulatory and compliance implications.
Furthermore, creating a pilot roadmap with defined checkpoints and decision points can help keep a pilot effort on track and beneficial for both parties. These milestones enable ongoing transparency, feedback, and communication between the startup and key decision makers, while simultaneously pushing the pilot forward and creating course correction opportunities as needed.
Lastly, corporations and health systems are often centered on quarter-to-quarter results and lagging, financial-focused metrics. However, when engaging with startups, especially during pilots, metrics should not be solely focused on economic impact and return on investment. Instead, metrics should focus on understanding and documenting the business value, user experience, and scalability of the startup’s solution. It is important to remember that the purpose of a pilot is to test a solution before deciding on a full implementation – success metrics should ultimately be aligned to the purpose and overall objective of the pilot.
At 11TEN Innovation Partners, we are very focused on collaboration and working across industry lines, and startups play a critical role within our ecosystem of collaborative innovators in the healthcare space. We take a unique, two-pronged, proactive approach to engaging with startups. First, in collaboration with our ecosystem partners, we are constantly identifying areas of innovation through our demand-driven approach. Through exercises like our Innovation Launchpad process, we identify specific areas where our partners can benefit from engaging with startups, then we proactively reach out to target startups and help ideate and facilitate partnership opportunities moving forward.
In parallel, we are keeping a pulse on the market and identifying and curating lists of industry-changing, disruptive startups that may be applicable to our industry partners. As part of our process, we continuously engage with and vet startups, and then proactively share them with our partners to see if there is a potential opportunity to explore.
It’s a win-win situation – our ecosystem partners have access to curated lists of potential startups to engage with, whereas our startup partners can access clinical validation environments, commercialization experts, and strategic alliances with customers and distribution partners.
For more information about our startup-enabled solutions and partnerships, contact the 11TEN team today.
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